View Daily Data Tracking History
View Bill Text
View Statement of Purpose / Fiscal Impact
H0723......................................................by STATE AFFAIRS
TELEPHONE CORPORATIONS - Adds to existing law to permit incumbent telephone
corporations to elect to establish caps on rates for basic local exchange
service; and to provide the method of determining the price cap rate.
03/08 House intro - 1st rdg - to printing
03/09 Rpt prt - to St Aff
H0723
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 723
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE ESTABLISHMENT OF A CAP ON RATES FOR BASIC LOCAL EXCHANGE SER-
3 VICES PROVIDED BY INCUMBENT TELEPHONE CORPORATIONS; AMENDING CHAPTER 6,
4 TITLE 62, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 62-605A, IDAHO
5 CODE, TO PERMIT INCUMBENT TELEPHONE CORPORATIONS TO ELECT TO ESTABLISH
6 CAPS ON RATES FOR BASIC LOCAL EXCHANGE SERVICE AND TO PROVIDE THE METHOD
7 OF DETERMINING THE PRICE CAP RATE.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Chapter 6, Title 62, Idaho Code, be, and the same is
10 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
11 ignated as Section 62-605A, Idaho Code, and to read as follows:
12 62-605A. ELECTION TO ESTABLISH PRICE CAPS FOR BASIC LOCAL EXCHANGE SER-
13 VICE -- PROCEDURE. (1) An incumbent telephone corporation which, pursuant to
14 sections 62-604 and 62-605, Idaho Code, has elected to exclude its telecommu-
15 nications services other than basic local exchange service from regulation
16 under title 61, Idaho Code, may file with the commission a notice that such
17 telephone corporation elects to establish its prices for basic local exchange
18 services in accordance with the provisions of this section. Upon such elec-
19 tion, the telephone corporation shall establish price caps upon basic local
20 exchange services as provided herein. Thereafter, the prices for such tele-
21 phone corporation's basic local exchange services and such uniform noneconomic
22 regulatory requirements as may be determined by the commission to be neces-
23 sary, shall be established pursuant to the provisions of this chapter. Price
24 caps established as provided herein shall also apply to nonrecurring charges
25 for services used or useful in the provision of basic local exchange service
26 as set forth in the telephone corporation's regulated services tariff on file
27 with the commission on the date of the notice of election given in accordance
28 with this section.
29 (2) An incumbent telephone corporation which had not, on or before the
30 first day of January 2000, elected to exclude telecommunications services
31 other than basic local exchange service from regulation under title 61, Idaho
32 Code, may make such election and, at the same time, may, but is not required
33 to, elect to establish the prices for basic local exchange service pursuant to
34 the provisions of this section.
35 (3) For incumbent telephone corporations which, prior to January 1, 2000,
36 had elected to exclude telecommunications services other than basic local
37 exchange service from regulation under title 61, Idaho Code, and whose rates
38 for basic local exchange services on the date of the notice of election pro-
39 vided herein, were set by the commission based, in part, upon cost allocations
40 established by the commission pursuant to section 61-622A, Idaho Code, the
41 price cap on rates for basic local exchange services offered by such telephone
42 corporations shall be the rate for such services in effect on the day of the
43 notice of election as set forth in subsection (1) of this section, subject to
2
1 any adjustments permitted by this section. The effective date for any such
2 price caps shall be not later than thirty (30) days following the filing of
3 the notice of election.
4 (4) For incumbent telephone corporations whose rates for basic local
5 exchange services on the date of such notice of election were set by the com-
6 mission without an allocation of costs between telecommunication services pro-
7 vided pursuant to title 61, Idaho Code, and telecommunication services to be
8 provided pursuant to title 62, Idaho Code, the commission shall make a deter-
9 mination within thirty (30) days of the date of the notice of election whether
10 such allocations will be required prior to establishing a price cap on rates
11 for basic local exchange service. In the event that the commission determines
12 that cost allocations are required prior to establishing price caps on basic
13 local exchange rates pursuant to this section, the commission shall establish
14 such cost allocations and establish a just and reasonable rate for basic local
15 exchange service provided by said telephone corporation in the manner provided
16 and pursuant to the provisions of title 61, Idaho Code, and section 62-622,
17 Idaho Code. The commission shall make such decision within one hundred eighty
18 (180) days of the filing of the notice of election in subsection (1) of this
19 section. The telephone corporation filing such notice of election may withdraw
20 such notice and elect to continue regulation and pricing of its basic local
21 exchange services under title 61, Idaho Code, at any time during the process
22 described herein, including following a decision of the commission establish-
23 ing price caps on rates for basic local exchange service.
24 (5) An incumbent telephone corporation may charge prices that are lower
25 than the price cap established pursuant to this section either throughout its
26 service territory or within an individual local exchange area. Provided how-
27 ever, upon the petition of a nonincumbent telephone corporation, the commis-
28 sion shall establish a minimum price for the incumbent telephone corporation's
29 basic local exchange service, if the commission finds, by a preponderance of
30 the evidence, that the incumbent telephone corporation's reduced rates in the
31 affected area(s) are below the incumbent telephone corporation's average vari-
32 able costs of providing such service in such area(s).
33 (6) (a) An incumbent telephone corporation shall not charge rates that
34 exceed the price caps established in accordance with this section unless
35 the commission finds, pursuant to chapter 6, title 62, Idaho Code, that
36 basic local exchange rates in a local exchange calling area should not be
37 regulated because effective competition exists for basic local exchange
38 service throughout the local exchange calling area.
39 (b) The commission shall authorize increases in the price caps on rates
40 for basic local exchange service:
41 (i) To cover the costs of implementation and operation of any
42 commission-ordered extended area service (EAS) which results in the
43 expansion of local calling areas served by incumbent telephone corpo-
44 rations;
45 (ii) To facilitate the commission's creation and implementation of a
46 universal service funding mechanism under this chapter including, but
47 not limited to, the application of universal service charges or
48 increasing the rate for universal services to an affordability
49 benchmark level in commission-designated high cost areas;
50 (iii) To cover any tax, surcharge or fee imposed by federal or state
51 authorities and applicable to basic local exchange services following
52 the date of the notice of election described in subsection (1) of
53 this section.
54 (c) The commission shall adjust the price caps for basic local exchange
55 service on a revenue neutral basis to directly reflect any commission-
3
1 ordered deaveraging of prices of unbundled network elements used in the
2 provision of basic local exchange service.
3 (d) The commission may, in its discretion, increase the price caps for
4 such other purpose as the commission deems to be just and reasonable.
STATEMENT OF PURPOSE
RS10230
The proposal authorizes Idaho's price regulated
telephone corporations to elect to cap prices for
their residential and small business customers at
levels approved by the Idaho Public Utilities
Commission as an alternative to rate of return
regulation of company revenues. The legislation
provides price protection and stability for the
consumer and sets forth the procedure for adoption
of this alternative form of price regulation.
FISCAL NOTE
There is no fiscal impact associated with the
legislation. It would eliminate costly rate-setting
proceedings and result in less state agency staff
time for price regulation.
CONTACT: Elizabeth Criner
U S West Communications
208-385-8692
STATEMENT OF PURPOSE/FISCAL NOTE H 723